How to graph the demand curves
When a president talks about relaxation of monetary policy or fiscal expansion to stimulate the economy, we are talking about changing the aggregate demand curve . Aggregate demand is the sum of the individual demand curves of all buyers inside and outside the country. The individual demand curve graphically represents a demand curve that shows the quantity of a good that a consumer is willing to buy based on the price . For normal goods, there is an inverse or negative relationship between the quantity demanded and the price, consumers buy more than one good at lower prices than at higher prices. This relationship is known as the law of demand.
- Rule (optional)
- Graph paper (optional)
Create a table with two columns - price and quantity - to make an individual demand curve for a good, hamburgers with cheese, for example.
Fill the columns with the amount of the good you are willing to buy at different prices. Write prices ranging from 1 euro to 10 euros with an increase of 1 euro in the price column. Enter the corresponding number of cheeseburgers you would like to buy at each price in the quantity column. The demand curve has been completed.
Draw a vertical line - the axis - with a ruler. Label it as prices or P (x). Write each price next to the axis line and with the lowest price at the bottom of the line. Increase prices on the line until you reach your highest price.
Draw a horizontal line - the x-axis - from the feet of the vertical line and to the right. Label it Quantity oq (x). Write each quantity of merchandise below the line of the x-axis, with the least amount at the corner where the X-axis and the Y-axis meet. Increase the amounts through the line, moving to the right, until you reach your largest amount.
Mark the quantity demanded at the first price with a point on the graph. Start from the top of the demand curve. If 10 hamburgers with cheese are required at 1 euro each, the mark on the X axis is equal to 10 and on the Y axis it is equal to 1. That is the point (10, 1) on the graph.
Repeat step 5 for each price and the corresponding amount.
Join the points to complete the demand curve.